Liquidator not liable for solicitors' fees under CFA where actual dealings with solicitors implied they would be paid on recoveries only basis (High Court)

In Stevensdrake Ltd (t/a Stevensdrake Solicitors) v Hunt (as Liquidator of Sunbow Ltd) [2016] EWHC 342 (Ch), the High Court had to decide whether a liquidator had personal liability under a Conditional Fee Agreement (CFA) for the fees of the solicitors he was accustomed to instruct on insolvency matters. It was possible that the personal liability expressly imposed on the liquidator by the CFA was overridden by the evidence of the parties' course of dealings, which had appeared to be on the common understanding that the solicitors would only be paid out of the realisations (if any) of the insolvent estate.

Note: the decision in this case was partially overturned on appeal (Stevensdrake Ltd (t/a Stevensdrake Solicitors) v Hunt [2017] EWCA Civ 1173 (31 July 2017)) and we add a comment on that in the comments section at the end of this update.